WASHINGTON–Sen. Elizabeth Warren (D-MA) and other Democrats are demanding the Federal Reserve turn over information about changes inside its division of banking supervision in the wake of a Wall Street Journal report about internal tensions sparked by job cuts and sidelined examiners.
Warren has asked the Fed’s vice chair for supervision, Michelle Bowman, for information about those changes, as well as plans to conduct a new report on the 2003 failure of Silicon Valley Bank, according to letters viewed by the Journal.
The letters were sent ahead of an expected Senate oversight hearing next week at which Bowman would testify, the Journal said.
Reshaping Oversight
The Journal noted Bowman is one of several regulators appointed by President Trump who implementing a plan to significantly reshape how examiners scrutinize banks and ensure they don’t take on excessive risk. She and others in the administration, including Treasury Secretary Scott Bessent, have criticized changes put in place after the 2008-09 financial crisis, arguing that they have made banks less competitive and constrained the economy, the Journal added.
“Bank watchdogs such as Warren, who has long supported tougher oversight, have voiced concerns about the Trump administration’s plans to roll back financial regulations,” the Wall Street Journal reported.
Slashed Staff
The report said that Bowman has moved to slash Fed staff and erect guardrails against what she describes as “abusive” supervisory practices.
“A former employee of her family’s small-town Kansas bank, she has demonstrated a willingness, unusual among regulators, to hear out banks over their criticisms of the supervisory process and even specific interactions with examiners,” the Journal reported.
Complaints by banks have led to some examiners being sidelined or taken off the job by their supervisors, the Journal reported.
The letter from Warren, Ruben Gallego (D-AZ.) and four other senators said it would be “highly inappropriate” to remove bank examiners at the request of banks.
“It is critical that examiners be allowed to evaluate banks’ safety and soundness and their compliance with applicable laws and regulations without fear or favor,” the letter said, according to the Journal.
NCUA to be Among Those Testifying
Bowman is expected to testify next Thursday along with the Trump-appointed heads of the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and NCUA.
